IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Bottom-Up

<p><a href="https://www.smartkarma.com/entities/fwd-group-holdings" target="_blank" data-smartkarma-citation="entities:34332:1" rel="noopener">FWD Group Holdings (FWD US)</a> is a Pan-Asia insurer founded in 2013 by Richard Li. FWD is seeking to raise $2 billion through an NYSE IPO and a valuation between $13 billion and $15 billion, according to press reports. </p><p>In <a href="https://www.smartkarma.com/insights/fwd-group-ipo-forward-march" target="_blank" data-smartkarma-citation="insights:58263" rel="noopener">FWD Group IPO: Forward March</a>, we stated that in the long-term, FWD’s compelling customer propositions and multi-channel distribution across different geographies within Asia will likely support further market share gains. FWD notes that there remains significant potential for cross-selling and up-selling to its millennial customers (59% of organic new individual policyholders in 1H21) as they advance through different life stages and gain spending power. On balance, we concluded that FWD has sufficient headroom to continue to gain market share while improving profitability. </p><div class="content-highlight"><p>A successful listing of FWD will provide investors with a new proxy for Asian insurance growth vs well-established names such as <a href="https://www.smartkarma.com/entities/aia-group-ltd" target="_blank" data-smartkarma-citation="entities:14895:1" rel="noopener">AIA Group Ltd (1299 HK)</a> and <a href="https://www.smartkarma.com/entities/prudential-plc-4b9124ab-0799-4543-abca-bac6f31da5b6" target="_blank" data-smartkarma-citation="entities:34048:1" rel="noopener">Prudential PLC (2378 HK)</a>. Prudential’s recent oversubscribed share offer which raised US$2.4 billion in Hong Kong will help grow its investor base in Hong Kong and increase the liquidity of its shares on the HKEx. In this context, there is increasing interest in drawing comparisons between FWD, AIA and Prudential. In this note, we compare the insurers’ actuarial assumptions and key metrics across FWD’s key regions.  </p></div>

FWD Group Holdings (FWD US) is a Pan-Asia insurer founded in 2013 by Richard Li. FWD is seeking to raise $2 billion through an NYSE IPO and a valuation between $13 billion and $15 billion, according to press reports. In FWD Group IPO: Forward March, we stated that in the long-term, FWD’s compelling customer propositions and multi-channel distribution across different geographies within Asia will likely support further market share gains. FWD notes that there remains significant potential for cross-selling and up-selling to its millennial customers (59% of organic new individual policyholders in 1H21) as they advance through different life stages and gain spending power. On balance, we concluded that FWD has sufficient headroom to continue to gain market share while improving profitability. A successful listing of FWD will provide investors with a new proxy for Asian insurance growth vs well-established names such as AIA Group Ltd (1299 HK) and Prudential PLC (2378 HK). Prudential’s recent oversubscribed share offer which raised US$2.4 billion in Hong Kong will help grow its investor base in Hong Kong and increase the liquidity of its shares on the HKEx. In this context, there is increasing interest in drawing comparisons between FWD, AIA and Prudential. In this note, we compare the insurers’ actuarial assumptions and key metrics across FWD’s key regions.  

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

FWD Group Holdings / Equity Capital Markets

<div><p>FWD, a pan-Asian life insurer founded by Richard Li, aims to raise up to US$3bn in its US IPO. </p></div><div><p>FWD is a pan-Asia life insurer operating in ten markets including Hong Kong (and Macau), Thailand (and Cambodia), Japan, the Philippines, Indonesia, Singapore, Vietnam and Malaysia. Southeast Asia markets contributed over 40% of its Value of New Business (VNB) in 2020. It had served over 9.9m customers as of Jun 21.</p></div><div>
<div>In our previous note, we spoke about the positive  and negatives aspects of the deal in our earleir notes, <a href="https://www.smartkarma.com/insights/fwd-pre-ipo-the-positives-growing-fast" target="_blank" rel="noopener">FWD Pre-IPO - The Positives - Growing Fast</a>, <a href="https://www.smartkarma.com/insights/fwd-pre-ipo-the-negatives-strategy-remains-unclear" target="_blank" rel="noopener">FWD Pre-IPO - The Negatives - Strategy Remains Unclear </a>and <a href="https://www.smartkarma.com/insights/fwd-pre-ipo-peer-comparison" target="_blank" rel="noopener">FWD Pre-IPO - Peer Comparison</a>.</div>
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<div>In this note we will talk about valuations.</div>
</div>

FWD, a pan-Asian life insurer founded by Richard Li, aims to raise up to US$3bn in its US IPO. FWD is a pan-Asia life insurer operating in ten markets including Hong Kong (and Macau), Thailand (and Cambodia), Japan, the Philippines, Indonesia, Singapore, Vietnam and Malaysia. Southeast Asia markets contributed over 40% of its Value of New Business (VNB) in 2020. It had served over 9.9m customers as of Jun 21.
In our previous note, we spoke about the positive  and negatives aspects of the deal in our earleir notes, FWD Pre-IPO - The Positives - Growing Fast, FWD Pre-IPO - The Negatives - Strategy Remains Unclear and FWD Pre-IPO - Peer Comparison.

In this note we will talk about valuations.


<div><p>FWD, a pan-Asian life insurer founded by Richard Li, aims to raise up to US$3bn in its US IPO. </p></div><div><p>FWD is a pan-Asia life insurer operating in ten markets including Hong Kong (and Macau), Thailand (and Cambodia), Japan, the Philippines, Indonesia, Singapore, Vietnam and Malaysia. Southeast Asia markets contributed over 40% of its Value of New Business (VNB) in 2020. It had served over 9.9m customers as of Jun 21.</p></div><div><div>In our previous note, we spoke about the positive  and negatives aspects of the deal in our earleir notes, <a href="https://www.smartkarma.com/insights/fwd-pre-ipo-the-positives-growing-fast" target="_blank" rel="noopener">FWD Pre-IPO - The Positives - Growing Fast</a> and <a href="https://www.smartkarma.com/insights/fwd-pre-ipo-the-negatives-strategy-remains-unclear" target="_blank" rel="noopener">FWD Pre-IPO - The Negatives - Strategy Remains Unclear</a>.</div></div><p></p><p>In this note we will undertake a peer comparison.</p>

FWD, a pan-Asian life insurer founded by Richard Li, aims to raise up to US$3bn in its US IPO. FWD is a pan-Asia life insurer operating in ten markets including Hong Kong (and Macau), Thailand (and Cambodia), Japan, the Philippines, Indonesia, Singapore, Vietnam and Malaysia. Southeast Asia markets contributed over 40% of its Value of New Business (VNB) in 2020. It had served over 9.9m customers as of Jun 21.In our previous note, we spoke about the positive  and negatives aspects of the deal in our earleir notes, FWD Pre-IPO - The Positives - Growing Fast and FWD Pre-IPO - The Negatives - Strategy Remains Unclear.In this note we will undertake a peer comparison.

Silver Point

Thomas J. Monaco

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

<p><strong><em>*Another Weak Number: </em></strong>Waterdrop, Inc. (WDH.US) [Waterdrop] reported its second set of earnings results since its IPO, coming in at a negative CNY 656 mn  - declining CNY 286 mn or 77.3% linked quarter bringing cumulative losses since the IPO to over CNY 1.0 bn or about 38% of IPO funds raised. Challenges came from overall cost growth of CNY 411 mn (30.6%) due primarily to sales and marketing spend; and    </p><p><strong><em>*”Notice” To Online Insurers: </em></strong>The China Banking and Insurance Regulatory Commission’s (CBIRC) roll out of the internet insurance revision plan “<em>Notice on Carrying out Special Rectification of Internet Insurance Disorders</em>”, aims to scrutinize mainland China’s insurance technology platforms, ordering firms and agencies to end improper marketing and pricing practices, and improve privacy protections. This will be a direct challenge for Waterdrop and other mainland Chinese insurers. </p>

*Another Weak Number: Waterdrop, Inc. (WDH.US) [Waterdrop] reported its second set of earnings results since its IPO, coming in at a negative CNY 656 mn  - declining CNY 286 mn or 77.3% linked quarter bringing cumulative losses since the IPO to over CNY 1.0 bn or about 38% of IPO funds raised. Challenges came from overall cost growth of CNY 411 mn (30.6%) due primarily to sales and marketing spend; and    *”Notice” To Online Insurers: The China Banking and Insurance Regulatory Commission’s (CBIRC) roll out of the internet insurance revision plan “Notice on Carrying out Special Rectification of Internet Insurance Disorders”, aims to scrutinize mainland China’s insurance technology platforms, ordering firms and agencies to end improper marketing and pricing practices, and improve privacy protections. This will be a direct challenge for Waterdrop and other mainland Chinese insurers. 

<p><strong><em>*Regulatory Onslaught Continues: </em></strong>The China Banking and Insurance Regulatory Commission (CBIRC) announced that it is investigating Ping An Insurance’ (2318.HK) [Ping An] property investments. Regulatory scrutiny of Ping An is occurring against the backdrop of the country’s skyrocketing real estate market and excessive leverage to the sector. This is on top of the CBIRC’s roll out of the internet insurance revision plan, which aims to scrutinize mainland China’s insurance technology platforms to which Ping An too has exposure; and</p><p>*<em><strong>Improving Overall Fundamentals: </strong></em>Ping An’s reported 1H21 results of CNY 58.0 bn, declined CNY 16.4 bn (22.0%) HOH related to the above real estate risk. Excluding the real estate write-downs, we note that Ping An’s HOH operating result would have actually improved CNY 8.2 bn or 11.0% on the back of insurance fundamental improvement nearly across the board.</p>

*Regulatory Onslaught Continues: The China Banking and Insurance Regulatory Commission (CBIRC) announced that it is investigating Ping An Insurance’ (2318.HK) [Ping An] property investments. Regulatory scrutiny of Ping An is occurring against the backdrop of the country’s skyrocketing real estate market and excessive leverage to the sector. This is on top of the CBIRC’s roll out of the internet insurance revision plan, which aims to scrutinize mainland China’s insurance technology platforms to which Ping An too has exposure; and*Improving Overall Fundamentals: Ping An’s reported 1H21 results of CNY 58.0 bn, declined CNY 16.4 bn (22.0%) HOH related to the above real estate risk. Excluding the real estate write-downs, we note that Ping An’s HOH operating result would have actually improved CNY 8.2 bn or 11.0% on the back of insurance fundamental improvement nearly across the board.

China

New China Life Insurance Company Ltd. provides life insurance services. The Company provides life insurance, accident insurance, health insurance products, and other related insurance products. New China Life Insurance offers services in China.

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New China Life Insurance (1336 HK)

FWD Group Vs AIA Vs Prudential

FWD is seeking to raise $2 billion through an NYSE IPO. In this note, we compare FWD, AIA and Pru’s actuarial assumptions and key metrics across...

Arun George

FWD Pre-IPO - Thoughts on Valuation

FWD, a pan-Asian life insurer founded by Richard Li, aims to raise up to US$3bn in its US IPO. In this note we will talk about our thoughts on...

Sumeet Singh

FWD Pre-IPO - Peer Comparison

FWD, a pan-Asian life insurer founded by Richard Li, aims to raise up to US$3bn in its US IPO. In this note, we will undertake a peer comparison.

Sumeet Singh

Waterdrop – Someone Plug The Dike

WATERDROP: WDH reported its second set of earnings since the IPO, coming in at a negative CNY 656 mn - declining 77.3% QOQ bringing cumulative...

Thomas J. Monaco

Ping An Insurance - Ugggh

PING AN INSURANCE: The CBIRC is investigating Ping An's property investments against the backdrop of the country’s skyrocketing real estate market...

Thomas J. Monaco

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